I think the other posts have pretty much covered it from a rental perspective, but another issue is the financing.The room will not be counted as a Bed Room (BR) for financing purposes. 

Other crap like a cat in the bedroom or putting a bed in the storage room is not important.

That $205k we paid was for a 2 bed/2 bath house of 900 square feet.

A great ROI on That duplex in the ghetto won’t really mean much when you are laying in a hospital bed with a Stab wound .

Each side is  1400sq ft but are 2 bed 1 bath. 

Basically, we bought a renovated house and when it was assessed the next year the property value went up $40k and property taxes shot up on us (added master bed and bath).

It's only 2 Bed, 1 Bath which makes me think I could make it a 3 + 2 and greatly increase the value (conservative estimating to $350K).

I pulled numbers from all listings, even those 8 bedroom log mansions with 2400 sqft of dock to the 1 bed 1920's lake cabin.

I live in the top unit which is a 4 bed 2 bath.

No carpet throughout the entire house.5 Bed / 2 Bath What made you interested in investing in this type of deal?